Development 2025-07-21

In this paper we present analysis on the recent historical trend in agriculture in the Eastern and Southern Africa (ESA) region, along with analysis of recent historical trends in temperature and precipitation. We also present 5 climate models and describe the possible future climates associated with these. We use these climate models with crop models -- for seven crops -- and bioeconomic models to further assess the impact on agricultural productivity throughout the region and how the agricultural sector will transform through 2050. While we evaluate seven crops in detail, we note the key role that maize plays for the region, and we assess -- considering the regional and global impact of climate change -- how the role of maize will change over time and whether the change will be rapid enough to shift regional agriculture into a more vibrant sector. We find that while the relative importance of maize to farmers in the region will decline, out to 2050 maize will remain the dominant crop. Additional policies and investments will need to be implemented if the goal is to hasten the transition to higher value or more nutritious crops. Thomas, Timothy S. Robertson, Richard D. bioeconomic models; climate change; maize; crop modelling; agricultural production; modelling; climate models; Eastern Africa; Southern Africa; Africa 2024-02-16 What triggered the widespread public backlash against tax reforms in Sub-Saharan Africa, echoing the scale and intensity of the Arab Spring? Economic factors, such as income and inequality, appear to be weak predictors of public attitudes toward redistribution. This study empirically examines corruption as a key factor shaping perceptions of tax burden and redistributive preferences. The analysis draws on newly available data from the 8th round of the Afrobarometer survey (2019–2021), which includes relevant questions for the first time. This period coincided with a wave of anti-tax protests across several African countries. The findings suggest that corruption is strongly associated with higher perceived tax burdens. The results also indicate that corruption diminishes the demand for and willingness to support redistributive taxation. The policy implications include tax compliance, inequality and governance issues on the continent. Welde, Andualem Assefa Corruption, Preference for Redistribution, Tax Burden, Sub-Saharan Africa 2025 Elections in fragile democracies are not merely contests over policy but battles for control over state resources, including foreign aid. Aid provides local governments with substantial discretionary funds, creating strong incentives for rent-seeking political actors to capture political office. To win elections, political actors, both in government and opposition, try to reduce electoral competition through targeted political violence, especially in weakly institutionalized settings, where the economic stakes from gaining (or losing) office are higher and the potential costs of using targeted violence are limited. We empirically test this argument using novel geo-located data on aid disbursements from 18 European donors and the United States, covering the period from 1990 to 2020. Applying an instrumental variables (IV) approach, we find that foreign aid is associated with higher levels of targeted political violence against local authorities and politicians, in particular during elections and in contexts with weak institutions and strong informal politics. These findings highlight the unintended consequences of foreign aid, showing how it can lead to targeted political violence by increasing the stakes of political competition. Axel Dreher Jingke Pan Christina Schneider foreign aid, targeted political violence, elections 2025 This paper analyzes data from urban Brazil using supervised machine-learning techniques to shed greater light on the role that childhood poverty plays in lifelong health and longevity. By examining a unique dataset collected over a 10-year period from thousands of very small, sub-neighborhood-level geographic areas, I document that child poverty measures have higher predictive power than household income, and other major socioeconomic variables, in forecasting child and adult health outcomes and lifespans. In addition, using a rich dictionary of hundreds of variables and different data-driven specification selections, the machine-learning models reveal that experiencing more severe deprivation in childhood is associated with a decrease of 4 percentage points in the probability of survival to ages 40 and 60. These predictions offer further economic insights on the importance of early life circumstances for human development. Dercio de Assis 2025 Overlap between school and farming calendars—pervasive in agrarian settings—constrains children’s time for both activities, potentially forcing trade-offs between schooling and child labor. Using shift-share estimation, I study an exogenous shift to overlap between school and crop calendars in Malawi, weighted and aggregated by communities’ pre-policy crop shares, matched to panel data on school-aged children. From pre- to post-policy, a five-day (i.e., one school-week) increase in overlap during peak farming periods decreases children’s school advancement by 0.14 grades—one lost grade for every seven children—while only resulting in 3.9 percent fewer children working on the household-farm. Policy simulations show how adapting the school calendar to minimize overlap with peak farming periods can be an effective strategy to increase school participation. Allen IV, James education; child labour; households; crop production; Malawi; Africa; Eastern Africa 2024-01-31 Do grandparents continue to play a vital role in their grandchildren’s lives even in societies where child health is no longer a primary concern? This study explores how the involvement of grandparents, traditionally associated with reproductive success, has evolved to support human capital formation. Drawing on the human capital framework, we rigorously model both grandparental and parental investments, examining their joint effects on cognitive development over time. Additionally, we explore how early nutritional status and cognitive abilities may influence subsequent investments. Using longitudinal data from the Young Lives study, which tracks children in Ethiopia, India, Vietnam, and Peru, we model the joint effect of support from grandparents and parental investments on children’s cognitive ability. We find that early childhood investments have a lasting impact on developmental outcomes. Our results demonstrate that grandparents’ involvement significantly enhances cognitive development in early childhood, with effects reaching nearly half the magnitude of parental investments. Moreover, these early influences indirectly shape cognitive outcomes later in childhood. Notably, their contribution amounts to half a year of schooling indirectly in Ethiopia, one-quarter in India, and around one month in Peru and Vietnam. Lund, Michael Borchgrevink Munoz, Ismael G. palloni, alberto 2025-06-19 Water scarcity is a major challenge in many Mediterranean countries, where intermittent water supply and inefficient distribution lead to significant economic and social costs. This paper examines the cost structure of drinking water utilities in Algeria, focusing on the impact of water rationing, network inefficiencies and production constraints. Using a translog cost function estimated with a Cluster-Robust Correlated Random Effects Instrumental Variable (CRE-IV) approach, we analyse the determinants of variable costs and assess network economies such as economies of density and scale, as well as trade-offs in water supply management. Our results indicate the presence of economies of scale in both water production and distribution, with cost elasticities of 0.7415 for production capacity and 0.7904 for distributed volume, suggesting that expanding service coverage can reduce average costs. However, we find strong cost complementarities between water losses and distributed volume, suggesting that utilities often prioritise increasing supply over network maintenance. Furthermore, the interaction between (possibly reduced) service hours and production capacity shows a significant positive effect on marginal costs due to the water availability constraint, highlighting the economic burden of continuous water supply in a context of resource scarcity. By estimating the shadow price of water in situ, we quantify the opportunity cost of water abstraction, and find a value of 18.59 DZD/m3, compared to the estimated marginal cost of 5.77 DZD/m3. This reflects the problem of water scarcity and the inefficiency of current supply strategies. Our findings underscore the need for better resource allocation policies that emphasise network rehabilitation, demand-side management and cost-reflective pricing mechanisms, hence providing important insights for policy makers seeking to improve the efficiency and sustainability of water supply systems in water-stressed regions. Ali ZEGGAGH Serge GARCIA Drinking water distribution, water supply interruptions, water scarcity, water losses, cost function, shadow price of water. 2025 This paper examines the macroeconomic impacts of adverse weather shocks on the Colombian economy, with a specific focus on agricultural output, food prices, and headline inflation. Drawing on empirical evidence from events such as the 2015–2016 El Niño, we document that these shocks tend to reduce agricultural output and increase inflation while having a limited effect on aggregate GDP growth. Motivated by these stylized facts, we develop a small open economy New Keynesian model for Colombia that introduces a mechanism in which weather shocks alter the relative prices of agricultural and non-agricultural goods. This framework allows us to capture the inflationary pressures induced by adverse climate events in a structural setting. Under our proposed calibration, food inflation, headline inflation, and inflation expectations rise in response to the shock, prompting the monetary authority to raise the interest rate to anchor inflation expectations. *****RESUMEN: Este documento examina los impactos macroeconómicos de choques climáticos adversos sobre la economía colombiana, con un enfoque específico en la producción agrícola, los precios de los alimentos y la inflación total. A partir de la evidencia empírica, documentamos que estos choques tienden a reducir la producción agrícola y aumentar la inflación, aunque con un efecto limitado sobre el crecimiento del PIB total. Motivados por estos hechos estilizados, se desarrolla un modelo neokeynesiano para una economía pequeña y abierta que introduce un mecanismo mediante el cual los choques climáticos afectan los precios relativos de bienes agrícolas y no agrícolas. Este marco permite capturar las presiones inflacionarias inducidas por eventos climáticos adversos de manera estructural. Bajo la calibración propuesta para Colombia, la inflación de alimentos, la inflación total y las expectativas de inflación aumentan en respuesta al choque, lo que lleva a la autoridad monetaria a incrementar parcialmente la tasa de interés con el fin de anclar las expectativas de inflación. José Vicente Romero Sara Naranjo-Saldarriaga Jonathan Alexander Muñoz-Martínez Extreme Weather events, El Niño Southern Oscillation (ENSO), Inflation, Small Open Economy New Keynesian Models, Eventos climáticos extremos, Fenómeno de El Niño (ENSO), Inflación, Economía pequeña y abierta, Modelos neokeynesianos. 2025-07 In 2018 and 2019, the US administration increased tari¤s on imports from China. Did these tariffs lead to more US imports from other countries such as Mexico? Using highly disaggregated data on the universe of Mexican firm-level exports, we find evidence of trade diversion from China to Mexico. We then combine the export data with detailed longitudinal employer-employee data to investigate the impact of trade diversion on labor market outcomes for workers employed by Mexican exporters. We find that trade diversion increased the labor demand of exporters exposed to US tariffs against China, resulting in more employment and higher wages, especially for low-wage workers such as female, unskilled, younger, and non-permanently insured employees. The effects were concentrated in technology and skill-intensive manufacturing industries. JEL Codes: F12 ; F14 ; L11. Chen, Natalie Novy, Dennis Solórzano, Diego Employment ; exports ; firms ; tariffs ; trade costs ; trade diversion ; wages ; workers 2025 The agriculture sector receives substantial fiscal subsidies in various forms, including through programs that are linked to production and others that are decoupled. As the sector has reached the technology frontier in production over the last three decades or so, particularly in high- and middle-income countries, it is intriguing to investigate the impact of subsidies on productivity at aggregate level. This study examines the impact of subsidies on productivity growth in agriculture globally using a long time series on the nominal rate of assistance for 42 countries that covers over 80 percent of agricultural production. The econometric results show heterogenous effects from various subsidy instruments depending on the choice of productivity measure. Regression results suggest a strong positive effect of input subsidies on both output growth and labor productivity. A positive but relatively small impact of output subsidies is found on output growth only. Subsidies that are mostly decoupled reveal no significant impact on any of the productivity measures. Mamun, Abdullah agricultural productivity; agricultural technology; econometrics; globalization; input output analysis; subsidies 2024-03-28 The El Nino Southern Oscillation (ENSO) weather event of 2015/16 caused severe drought conditions in northern and central Ethiopia affecting the welfare of millions of farmers in late 2015 and early 2016. Using nationally representative panel data collected in 2012 and 2016 and recent advances in the difference-indifferences literature, this paper explores the effects of the 2015/16 drought and the potential role of irrigation in reducing the adverse effects of the drought. We find that the drought caused, on average, a 37 percent reduction in net annual crop income, an 8 percent decline in area cultivated, a 3 percent decline in household dietary diversity score, and a 10 percent decline in the share of harvest sold for rainfed farmers. On the other hand, irrigating farmers affected by the drought managed to increase their daily expenditures by 72 percent of their average daily food expenditure in the pre-drought period, and maintained their net crop income, size of cultivated land, household dietary diversity, and share of harvest sold to the market. Overall, while rainfed agricultural producers suffered sharp declines in welfare, those farmers with access to irrigation maintained their economic status. The results suggest that irrigation protected farmers from the adverse effects of the 2015/16 ENSO event and given increasing climate variability in Ethiopia, the government should intensify its investment and support to irrigation development in the country. Mekonnen, Dawit Kelemework Marilign, Yalew M. Warner, James Ringler, Claudia drought; irrigation; resilience; farmers; Ethiopia; Africa; Eastern Africa 2024-02 This paper examines how political representation for marginalized groups affects development outcomes and environmental choices by studying the adoption of clean cooking fuels under India's Pradhan Mantri Ujjwala Yojana (PMUY). Focusing on political reservations for Scheduled Tribes (STs), we assess how these institutional arrangements influence household fuel use across ecologically diverse regions. Using village-level data from the 2020 Mission Antyodaya Survey and high-resolution forest cover data, we employ a spatial regression discontinuity design (SRD) to compare LPG adoption between Scheduled Areas (administratively designated tribal-majority regions) and non-Scheduled Areas. We find that ST political reservations at the assembly constituency level are associated with a significant reduction in PMUY uptake in Scheduled Areas. To explore variation within SAs, we employ Propensity Score Matching to assess the impact of the Panchayat Extension to Scheduled Areas Act (PESA), which mandates ST representation in local governance. We find that PESA increases LPG adoption in villages located in open forest and scrubland, while it reduces uptake in regions with moderately dense forests. Additionally, our analysis reveals that higher forest cover displaces clean fuel use, and quantile regressions confirm that PESA implementation is linked to forest gains-suggesting that politically empowered ST leaders may promote conservation, inadvertently reinforcing biomass dependence. Our findings highlight a policy trade-off between environmental stewardship and the clean energy transition in ecologically sensitive tribal areas. Ghosh, Samarpita Sarkhel, Prasenjit Clean Fuel, Forest Cover, PESA, Propensity Score Matching, Scheduled Area, Spatial Regression Discontinuity 2025 The future world population growth and size will be largely determined by the pace of fertility decline in sub-Saharan Africa. Correct estimates of education-specific fertility rates are crucial for projecting the future population. Yet, consistent crosscountry, comparable estimates of education-specific fertility for sub-Saharan African countries are still lacking. We propose a flexible Bayesian hierarchical model that reconstructs education-specific fertility rates by combining the patchy Demographic and Health Surveys (DHS) data and the United Nationsâ (UN) reliable estimates of total fertility rates (TFR). Our model produces estimates that match the UN TFR to different extents (in other words, estimates of varying levels of consistency with the UN). We present three model specifications: Consistent but not identical with the UN; fully-consistent (nearly identical) with the UN, and consistent with the DHS. Further, we provide a full time series of education-specific TFR estimates covering five-year periods between 1980 and 2014 for 36 sub-Saharan African countries. The results show that the DHS-consistent estimates are usually higher than the UN-fully-consistent ones. The differences between the three model estimates vary substantially in size across countries, yielding 1980â2014 fertility trends that diverge from each otherâmostly in level only, but also sometimes in direction. Dilek Yildiz Arkadiusz Wi?niowski Zuzanna Brzozowska Afua Durowaa-Boateng Bayesian, Sub-Saharan Africa, Education-specific fertility rates, Demographic and Health Survey 2023-08 In sub-Saharan Africa, child fostering-a widespread practice in which a child moves out of the household of her biological parents-can have significant implications for a child's overall well-being. Using longitudinal data from South Africa that includes individual tracking, we employ double machine learning techniques to evaluate the impact of fostering on nutrition, addressing biases related to selection into treatment and endogenous attrition, two common challenges in the literature. Our findings reveal that fostering reduces the probability of being stunted by 6.8 percentage points, corresponding to a 37 percent reduction compared to the mean prevalence. This improvement appears to be driven by foster children relocating to smaller, rural households, often including retired individuals, typically grandparents, who receive a pension. Furthermore, we find that it not only enhances the nutritional status of foster children but also benefits the nutrition of other children from sending households, suggesting that fostering can be mutually beneficial for both groups. Dumas, Christelle Gautrain, Elsa Gosselin-Pali, Adrien Child Fostering, Nutrition, Machine Learning, South Africa 2025 Africa is vulnerable to the impacts of climate change despite its minimal contribution to global greenhouse gas emissions. The continent’s burden manifests in shifting weather patterns which threatens food security and economic stability, compounded by a growing population. This paper is a novel attempt at understanding whether trade in “green goods" and engaging in “green practices" can reduce negative environmental outcomes in the region. Using local projections methods, we find that increasing trade in “green goods" decreases the harmful effect on the environment in the medium-term. In the medium-term, there are cumulative improvements in ecological footprint by about 4%, decreases in net CO2 emissions embedded in trade by about 60-100% of total domestic production, and decreases in PM2.5 air pollution by about 1%. We also construct a novel Green Practices Index for Sub-Saharan Africa to benchmark individual country performance and facilitate regional cooperation on green practices. We find that engaging in green practices decreases harmful environmental outcomes by about 0.3-1.5% in the medium-term. Samantha Borkhoche Miss Eman Abdulla Mr. Edward R Gemayel Vidhi Maheshwari Faten Saliba Development strategy; production practices; regional cooperation; externalities; resource use; growth resilience; local projection methods; Sub-Saharan Africa 2025-07-04 Climate change is increasingly acknowledged as a critical issue with far-reaching socioeconomic implications that extend well beyond environmental concerns. Among the most pressing challenges is its impact on global poverty. This paper projects the potential impacts of unmitigated climate change on global poverty rates between 2023 and 2050. Building on a study that provided a detailed analysis of how temperature changes affect economic productivity, this paper integrates those findings with binned data from 217 countries, sourced from the World Bank’s Poverty and Inequality Platform. By simulating poverty rates and the number of poor under two climate change scenarios, the paper uncovers some alarming trends. One of the primary findings is that the number of people living in extreme poverty worldwide could be nearly doubled due to climate change. In all scenarios, Sub-Saharan Africa is projected to bear the brunt, contributing the largest number of poor people, with estimates ranging between 40.5 million and 73.5 million by 2050. Another significant finding is the disproportionate impact of inequality on poverty. Even small increases in inequality can lead to substantial rises in poverty levels. For instance, if every country’s Gini coefficient increases by just 1 percent between 2022 and 2050, an additional 8.8 million people could be pushed below the international poverty line by 2050. In a more extreme scenario, where every country’s Gini coefficient increases by 10 percent between 2022 and 2050, the number of people falling into poverty could rise by an additional 148.8 million relative to the baseline scenario. These findings underscore the urgent need for comprehensive climate policies that not only mitigate environmental impacts but also address socioeconomic vulnerabilities. Fajardo-Gonzalez, Johanna Nguyen, Minh Cong Corral Rodas, Paul Andres 2025-07-15 We empirically investigate the economic impact of natural disasters on food prices and production. We address the key issues of data aggregation and counterfactual biases. Our data set consists of regional information on prices and production for fourteen food products in Peru. This granularity level of the data allows us to disentangle nominal from real effects, while we still can account for within-country differences. On the other hand, the random nature of intense rainfalls and droughts allows us to establish a natural counterfactual for each event by comparing between and within-regions. Our empirical results show that prices increase in the aftermath of disasters, while production strongly declines, which mask the price increases at the macroeconomic level. This is particularly apparent during extreme events. The supply channel turns out to be the main mechanism through which disasters affect prices. These effects are mostly heterogeneous. When conditioning on storage life-duration of the products, we find that prices of perishable products are affected by rainfalls only while those of semi-durable products by both rainfalls and droughts. Francisco Blasques Paolo Gorgi Siem Jan Koopman James Sampi Climate events, price, production, fixed effects panel data, difference-in-differences 2025-04-11 What is the environmental impact of exports? Focusing on 2000–20, this paper combines customs, administrative, and census microdata to estimate employment elasticities with respect to exports. The findings show that municipalities that faced increased exports experienced faster growth in formal employment. The elasticities were 0.25 on impact, peaked at 0.4, and remained positive and significant even 10 years after the shock, pointing to a long and protracted labor market adjustment. In the long run, informal employment responds negatively to export shocks. Using a granular taxonomy for economic activities based on their environmental impact, the paper documents that environmentally risky activities have a larger share of employment than environmentally sustainable ones, and that the relationship between these activities and exports is nuanced. Over the short run, environmentally risky employment responds more strongly to exports relative to environmentally sustainable employment. However, over the long run, this pattern reverses, as the impact of exports on environmentally sustainable employment is more persistent. Bezerra De Goes, Carlos Andre Canozzi Conceicao, Otavio Lara Ibarra, Gabriel Lopez-Acevedo, Gladys 2025-07-14 Due to strong filial piety, parents(-in-law) play an important role in their adult daughtersâ fertility decisions in Vietnam; women feel pressured to fulfil their duties to produce a male descendant for the family. However, rapid urbanisation and industrialisation mean that multigenerational households are becoming less common, despite having been the standard household structure for centuries. Based on the 2020â21 Vietnam Multiple Indicator Cluster Survey, we investigate if women who coreside with the parental generation are more likely to desire additional children. In an industrialised economy, grandparents may be an important source of childcare while simultaneously exerting pressure on their adult children to have additional children. Further, we explore the association of the sex of previous child(ren) to capture the pressure associated with son preference. Multivariate regressions reveal an association between coresiding with parents and the desire for a second child, regardless of the sex of the first child. Among women with two children, third-child desires do not appear to be associated with coresiding with parents but are substantially related to having two daughters. Given the strong two-child norm in Vietnam and previous policies implying negative consequences for parents with three or more children, few women show a desire for a third child. Those women who report a desire for a third child mostly have two daughters, reflecting societal norms about the need for a male heir. Yen Thi Hai Nguyen Truc Ngoc Hoang Dang Brian Buh Isabella Buber-Ennser Coresiding with parents, Desire for additional children, Son preference, Vietnam Multiple Indicator Cluster Survey 2023-08 Despite rapid increases in access to school in low- and middle-income countries, learning outcomes remain extremely poor. This has led to calls for a new policy focus on ensuring foundational literacy and numeracy skills. Yet we have little direct, causal evidence on the long-term effects of investing in foundational skills in the early years of school. In this paper, we estimate the relationship between early-grade skills and adult earnings, using longitudinal data from the Indonesia Family Life Survey. Individuals are tested in foundational literacy and numeracy between the ages of 7 and 12 and then followed through multiple survey rounds to adulthood between the ages of 24 and 29. After adjusting for family background in childhood, a one standard deviation difference in foundational skills is associated with an 11 percent increase in adult earnings. This effect is mediated in part but not primarily by completed schooling. Those with higher foundational skills as children are less likely to have had children themselves by age 24-29. We don’t see correlations with other health outcomes. If the associated relationship can be interpreted as causal, this magnitude of returns implies a large positive benefit-cost ratio for investments in foundational skills. Lee Crawfurd 2025-07-16 The Middle East and North Africa (MENA) region stands among the most vulnerable areas to the impacts of climate change. At the same time, with lax environmental regulations, this region’s integration into Global Value Chains (GVC) is modest. Thus, this paper aims to examine the effect of environmental stringency on GVC participation in MENA countries. To do so, using the World Bank Enterprise Surveys, this paper analyzes how environmental regulations and treaties affect both the extensive and the intensive margins of GVCs. The main results show that national environmental regulations increase the likelihood of integrating into GVCs when it is measured using both the simple and the strict definitions. This result highlights the role of such regulations in attracting GVCs in developing countries and thus lends support to the Porter Hypothesis. The paper also shows that these regulations increase the effect of spending on research and development on GVC. Yet, the results are less conclusive for the role of environmental treaties. These results remain robust when a mixed multilevel approach is used, and when large exporters, who might lobby to affect policy choices, are dropped from the analysis. In addition, at the sectoral level, national regulations are associated with higher GVC participation in the food sector in the MENA region and lower participation in the plastics one. Finally, regulatory stringency increases the probability of GVC participation for both SMEs and large firms, with the effect generally stronger for SMEs. Hazem, Nada Zaki, Chahir 2025-06-30